05 Apr International Business Environment And Strategy
International business is defined as the conduction of commercial activities across the national borders. These commercial activities may include the movement of goods and services, employees, technologies, or the transaction related to knowledge and intellectual property. The objectives of the international business are satisfied by import and export.
There are numerous ways through which the organizations conduct international business. These include
- setting up own business
- joint ventures and
- management contracts
With the help of international business, the transactions and trade between individuals and organizations are carried out at a global level. It also includes carrying out cross-border transactions and is often referred to as the globalization process. With the advancement in technology international business is expanding its realms and at present more than 25% of the goods and services produced in any country on an average are sold to some other nation. The mode of operation of the international business activities including import and export is very different from that of the domestic business. The reasons why the organizations engage in international business are:
- The organizations which to take the first mover advantage by getting into an unexplored international market and giving the benefits of providing the goods and services for the first time.
- The most common reason for the organizations to engage in international business is to go global and explore the immense potential for growth.
- The ability to acquire resources including products, services, technologies, information and capital in a way that financially benefits the organization also attracts them towards international business.
- When the home country of a business is small and has less population, the organizations take the global road to increase their market potential.
- A smaller home market also means fewer customers and if an organization has a potential for growth it is willing to serve more customers in a bigger market.
- The organizations also practice globalization and international business for discouraging the local competitors from operating globally and competing directly with them in the same space.
With the immense possibilities that come with globalization, there are numerous difficulties that the organizations need to overcome for practicing international business. Some of the common challenges that the organizations face when operating in other countries are:
- The rules and regulations across the international borders are very different and the organizations need to abide by them to carry out business activities.
- Language is also a big challenge that your organizations and their employees face and especially with the countries that do not have English as the primary or secondary language.
- The culture and social values across the nation vary to a great extent and these must be taken into account when dealing with the organizations or the customers belonging to that country.
- Another common challenge that the organization space is of gathering the required information related to the supply of the goods and services and their anticipated demand.
- Carrying out a research and surveying the international markets to study the trends and frequency of consumption of the goods and services consumes a lot of time and resources.
Therefore it can be concluded that while there are numerous differences between the management of a domestic business and an international business it is an excellent opportunity for the organizations to grow and develop both strategic early and financially. There are certain challenges that your organization space due to the complexity of international business but a strong competitive strategy can allow the organization to exploit this opportunity and emerge as a world leader.
Do you need assignment help in business management? Contact us today.